Gold Surges Past $4,600 Amid Dollar Weakness and Debt Concerns

Gold prices surged past $4,600 per ounce on Friday, marking its highest level in three months and propelling the metal toward a nearly 5% weekly gain. The rally is largely driven by a weaker US dollar and renewed concerns over soaring American debt.

The Treasury's decision to double long-term bond buybacks earlier this week has pushed yields lower and further weakened the dollar, adding fuel to gold's advance. Economist Mohamed El-Erian noted that gold was among the standout performers on Friday, trading alongside Bitcoin's rebound above $79,000.

Longtime gold advocate Peter Schiff sees the precious metal's rally as evidence that the Federal Reserve has lost credibility on its inflation target. According to Bank of America's Global Fund Manager Survey, a net 16% of managers now view gold as undervalued, the highest reading since March 2023.

Central banks have continued aggressive buying, with second-quarter purchases hitting a quarterly record. However, analysts remain divided on gold's next move, with some seeing potential targets toward $5,000 if dollar weakness persists and others cautioning that higher oil prices and sticky inflation could reinstate pressure on yields.